Opportunity Requires Decision, Please Advise

[tomb1]

I started driving solo for a new fleet owner with PantherII about a month ago, it's my first driving job and his first truck.
He wanted to pay me 50% butI bumped him to 55%, and I feel that is still low. Other than that he's a good guy and well- intentioned.
The truck is an 2001 Freightliner Century with a 24 foot box, 390,000 miles. There is no inverter and the accessory power cuts off quickly. I've been using a cooler and a lantern.
I met a Panther driver on the road with an FL70, 2001, bought new in 2003, with 200,000 miles.It does have an inverter, deep cycle battery, fridge, tv and microwave which would "change my whole life", says my wife.
He wants out and offered me 50% and I own the truck in 3 years.
This appeals to me because my credit sucks and I'm cash poor as well, probably my fastest way into my own truck without an investor/partner.
From what I've read on here, about the time I take ownership of the FL 70 it will be ready for a major overhaul if not before, so now I am a little scared.
I would welcome your opinions on any of the above, especially about taking the FL70 deal.
Thanks,
TomB

 

[RichM]

Big question is what engine does the FL 70 have in it. The Cat 3126 has a lot of horror stories at about 300-400 K on it. Also how well was the truck maintained and I would advise a oil analysis that you can get at Speedo stops for about $15.00
Another questiuon is when the truck is 5 years old and now owned by you will your carrier accept a truck of that age.Some carriers limit the age of D Trucks to 5 years.

 

[terryandrene]

At 100,000 miles per year, a modest 20% 0f which is deadhead, your share would be 50% of 96,000 or $48,000 each year. You'd be buying that used truck for $144,000 OR at 5% less gross to you for three years, you'd be buying that used truck for only (your anticipated three year current gross income minus 15%). Either way it costs the same.

Where you could get burned is if the 50% deal requires you to pay all of the truck overhead including repairs, tires, insurance Qualcomm fees, work accident insurance. What happens to the deal if you are injured and can't work for awhile, or forever, can you sublease to cover your personal downtime. What if you want to get out of the deal, do you forfeit all you've invested?

 

[tomb1]

Thanks for the quick responses.
The truck has the Cat 3126 (I've been reading the archives here, that's what has made me stop and reconsider this deal) with a 6 speed Fuller.
The rest of the deal is 50% of the mileage to me ($1.20 with PantberII) plus all fuel surcharges and accessorials. I pay fuel and tolls and $20/week workman's comp. Driving for someone else I hope to make about $50,000 net (after fuel but before taxes). Owner pays maintenence, plates, etc.
At 5% that costs me about $3500/ year to buy the truck, based on $.70 mile x 100,000 or $70,000 gross. This owner, and I think most owners standard deal is 60% however, that would have me paying 10% or about $7,000/ year for this truck.
I guess the biggie is what happens if we drop an engine, and if I am unable to work.
The thing is even with the extra 10% I doubt if I would be able to finance a truck of my own in three years.

 

[LDB]

I see three options. You stay where you are at 55% making 66 cpm for all paid miles. You find another owner to drive for working on the 60/40 method and make 72 cpm for all paid miles. You take this opportunity at 50/50 making 60 cpm for all paid miles.

For the sake of discussion we'll presume the miles etc. would be the same for all 3 options. For the sake of easy arithmetic we'll presume 100,000 paid miles per year. Obviously deadhead etc. are going to affect your net income but for this I'm looking at the gross income of each option.

If you stay where you are it's $66,000 for the year. If you find an owner and get 60/40 it jumps to $72,000 for the year. If you take the FL70 option it drops to $60,000 for the year. In 3 years you own the truck. In 3 years you could make $18,000 more where you are or $36,000 more by finding a 60/40 deal.

Questions. Will you be able to continue running the truck after it's 5 yrs old? I think most companies will keep you on but just won't let you sign on with a truck over 5 yrs old. Do you believe the truck is worth $36,000 to you in 3 yrs when it becomes yours? If so, it may be an ok deal. If not then look for a 60/40 deal instead.

Lastly, it will probably be less than the $36,000 because you probably won't get 100,000 paid miles per year so the actual cost to you will be lower. It's the general idea I was illustrating. You'll have to fill in your own numbers and decide from there. Good luck.

Leo
truck 4958

Support the entire Constitution, not just the parts you like.

 

[davekc]

I always believe, the most simple way, is usually the best way.
These deals mentioned are getting to clouded with "what ifs"
It appears as a colorized lease purchase.

Based on your post I would drive on a 60/40 split and save your money.
The industry has been very erratic depending on the carrier.

Once the truck has reached its payoff point, it will likely have little value.
Save your cash while watching the market and then pay cash or have a substantial down payment when the timing is right.

Only in very rare instances do you ever see a "lease purchase" go to term on a used piece of equipment.

Davekc
owner
20 years

 

[bigguy1001]

Follow example # 3 from LDB. With $36,000, and 3 years experience, you should have no difficulty financing a truck.

 

[guest]

Davekc,

You mention the fluctuations in the cost of used equipment in recent years. Let's say you have a 2 year old expedite truck with 200,000 miles that was purchased new for $73,000 (assume it has a Cummins engine). What is the low and high you have seen for used trucks like this in the last 3 years or so? For example, maybe $38,000 for a 1998 in 2000, or maybe $29,000 for a 2000 in 2002.

 

[davekc]

mention the fluctuations in the cost of used equipment in recent years. Let's say you have a 2 year old expedite truck with 200,000 miles that was purchased new for $73,000 (assume it has a Cummins engine). What is the low and high you have seen for used trucks like this in the last 3 years or so? For example, maybe $38,000 for a 1998 in 2000, or maybe $29,000 for a 2000 in 2002.

Trucker/Lawyer

That is pretty accurate.
As a rule of thumb, take 20 to 25 percent of the new original cost for each year.
There are some variables with milage, type of equipmnet, and how it was purchased originally.

There will be some changes depending on how many trucks are on the market.
Three issues currently are on the horizon.
The first is the 2007 emission standards.
The second is how many go bankrupt and provide repos.
And do dealers keep new vehicles at a inflated price.

Davekc
owner
20 years

 

[tomb1]

My truck owner has agreed to bump me to 60/40. Itlooks like the best option for now.
Thanks for all the replies.

 

[Tennesseahawk]

If you hafta pay insurance and repairs out of your 60%, you're making a mistake. The dream of owning your own truck can quickly turn to a nightmare when you hafta replace something, such as a $5000 transmission.

60/40 is a basic split with the 60 paying fuel (and in some cases tolls). One cannot base the upkeep of a truck on their 60%.

Drive for awhile without the itch to own. Learn from your o/o what expenses he has, then figure it out to how much you've been making on your 60/40. I'm sure you won't be happy with your take-home, if there IS any. You'll probably want out of it after you notice you're not making anything, and have nothing to show but repair bills.

 

[tomb1]

TH,
I can only imagine what a horror story that would be.
I pay fuel and tolls.
We are still debating fuel tax, I'm sure he will fall in line with the standard deal.
I like the biz and my truck owner, he has never driven either so there is a learning curve for both of us.
TomB

 

[plumcrazy8]

I've done both the Owner/Operator and the 60/40 "driver" and much prefer the "driver" situation. The owner/operator (which is what you are if you are buying the truck in any manner) repair costs can, and usually do, put you out of business. Fuel TAXES shouldn't scare you if you pay attention to miles driven per state and purchase enough fuel in each state. Fuel PRICES are only scary if you're not getting 100% of the surcharge or not watching your load offers closely enough. The whole FL-70 thing scares anybody with experience in this industry - if the "jackhammer" ride doesn't kill you the nasty 3126 cat will! My money would be with a Super-D unit and a 60/40 deal.